Pennsylvania Bets on Biofuels

HARRISBURG, Pennsylvania, July 18, 2008 (ENS) – Pennsylvania Governor Ed Rendell signed two pieces of legislation last week that will help spur the development of homegrown biofuels in Pennsylvania and establish new requirements that every gallon of gasoline and diesel fuel contain a percentage of ethanol and biodiesel.

“Pennsylvanians are struggling with higher fuels costs,” said Governor Rendell. “Record-high fuel prices are straining family budgets and pinching the bottom lines of our businesses. We need to reduce our dependence on foreign oil and keep our energy dollars in Pennsylvania, to invest in our economy and create jobs.”

The biofuel percentages established under the new law will go into effect once in-state production reaches certain levels.

The requirements include what the governor believes to be the nation’s first state-specific mandate for cellulosic ethanol, which is made from non-food plant materials.

“Pennsylvania can be to cellulosic ethanol what corn-based ethanol was to Iowa and the Midwest,” said Rendell. “Pennsylvania has an abundant supply of cellulosic ethanol feedstocks, including switchgrass, woodchips, municipal waste and agricultural waste. This alternative fuel law ensures that Pennsylvania farmers and businesses will fully realize the benefits of these resources.”

Tractors that run on biodiesel at the
Pennsylvania Farm Show, January
2008. (Photo credit unknown)

Environmentalists were pleased with the new measures. “We must begin to move away from our ‘addiction to oil,’ as President George W. Bush characterized our energy problem,” said Jan Jarrett, vice president of PennFuture. “With oil prices over $140 a barrel and diesel over $4.60 a gallon, these bills will start us on the road to recovery.”

“These policies will bring some relief to Pennsylvania’s hard-pressed families and businesses, bringing heating oil and gasoline and diesel costs down,” said Jarrett. “And it will also help Pennsylvania farmers who grow soybeans and other crops for biodiesel production, offering them a chance to compete both in and out of state.”

The use of renewable fuels results in a reduction in lifecycle greenhouse gas emissions compared to the petroleum fuel that is displaced.

Biodiesel reduces greenhouse gas emissions by about 50 percent, while cellulosic ethanol could reduce greenhouse gas emissions up to 86 percent, according to the U.S. Department of Energy.

Pennsylvania’s biodiesel manufacturers will benefit from new investments, which will help spur production, the governor said.

Pennsylvania will invest $5.3 million in its in-state biodiesel producers annually through June 30, 2011. These companies will be able to take advantage of a 75 cents per gallon subsidy that will be capped at $1.9 million per year per producer.

Under the new measure, as much as one billion gallons of biofuels will be added to the state’s fuel supply. All diesel fuel sold at retail must contain:

All gasoline sold at retail must contain 10 percent ethanol, once in-state cellulosic ethanol production reaches 350 million gallons.

Pennsylvania already has an in-state biodiesel production capacity of about 60 million gallons per year, and the state’s first large-scale ethanol plant – a 100 million gallon per year operation – is under construction in Clearfield County.

The developers of the Clearfield County plant – BioEnergy International and Lukoil Americas – have also committed to developing a pilot scale cellulosic ethanol plant. Another cellulosic demonstration facility is planned for Madison, Westmoreland County.

These projects, and similar ones expected to follow, will inject hundreds of millions of dollars into Pennsylvania’s economy in the coming years and create thousands of jobs.

“Each year, America incurs nearly $400 billion in additional debt to finance our appetite for oil,” said the governor. “Here in Pennsylvania, we spend approximately $30 billion to purchase liquid fuels from beyond our border. It’s time we keep more of that money here at home and invest in our biofuel manufacturers, communities and transportation industry.”

In a recent study commissioned by PennFuture, the global expert services company LECG LLC examined the benefits of offsetting 900 million gallons of petroleum-based transportation fuel with renewable and coal-derived fuels by 2017, as originally called for in the governor’s plan.

The study concluded that the plan would add nearly $1.5 billion to Pennsylvania’s economy, create as many as 25,775 new jobs in all sectors of the Pennsylvania economy and put an additional $6.6 billion into the pockets of Pennsylvanians over the next decade.